Sub-prime Bail Out

[Radar]

Originally Posted by DanaC

I do not believe it has been truly tested, anymore than I believe communism has been truly tested. Even the most hands off gvernments aren't actually hands off. Rules and laws relating to trade are skewed in favour of a particular class and even in a predominately laissez faire government such as America's there are such things as trade protectionism, subsidies and corporate welfare.

I tend to agree with you on capitalism not being fully tested, but not communism. Communism was setup the way it is described by Marx, but it never lasts because it violates human nature. What is the motivation for one person to produce more than another when there is no more reward? People who do more naturally want more than the guy who does less.

History has proven many times over that the more a country embraces socialism or communism, the more likely that country is to collapse financially under its own weight and beg capitalists to bail them out. Communism always ends up being totalitarianism because an iron fist is required to force people to violate their own nature.

Socialism and communism require force to exist, while capitalism does not. In capitalism every person is a winner in every transaction because every transaction is voluntary and each person will do what is in their own best interest.

I have a dollar and I want an apple. You have an apple and you want a dollar. I buy your apple for a dollar. We both win. Some will claim I was ripped off for paying a whole dollar for an apple, but to me it was worth the price. Nobody forced me to give up my dollar for an apple.

If I had been walking in the desert for days and was starving and the guy sold me the apple for $100, I am still not a victim. The value of the apple rises the more I want it.

[DanaC]

Communism was setup the way it is described by Marx, but it never lasts because it violates human nature.

I disagree. In fact the people attempting to 'set up' communism also disagreed...with each other. There are many ways of intepreting Marx, and the mensheviks and Bolsheviks each had their own analysis of how to go about creating a communist state. From the very start the project was riven with internal dissent and civil war. In such a climate, Strongmen flourish. Systems envisaged to promote democratic participation were in fact skewed to the needs of said Strongmen. Communism, as envisaged by Marx was never implemented.

[Radar]

Technically it can never be implemented 100% as envisioned by Marx because humans can't do it; only robots can because it violates our very nature. Capitalism on the other hand, could be and does not violate human nature.

[DanaC]

Technically it can never be implemented 100% as envisioned by Marx because humans can't do it; only robots can because it violates our very nature. Capitalism on the other hand, could be and does not violate human nature.

Again, I disagree. Communism doesn't sit well with our concept of what an advanced society is. There have been numerous cultures which have developed along broadly collectivist principles. Many of those cultures are cultures we deem to be anachronistic and undeveloped. But the people living within them are (or were) still humans and those cultures do not clash with their nature. Many such cultures have since been eroded through contact with our culture and our concepts of ownership, trade and the market. The reason communism appears to run contrary to human nature is that the kind of culture and sensibilities which 'won the race', so to speak, have not developed along broadly collectivist lines. But there were fits and starts of collectivism within the history and development of even these cultures.

There is nothing inherently natural about market forces, or inherently unnatural about collectivism or communism. We view such concepts from the perspective of people raised within one of those systems and as such we are viewing the one through the filter of the other.

[Radar]

There are only 2 choices.

1) Free-Market capitalism which does not require force to exist.

2) Everything else.

[Flint]

Originally Posted by Radar

1) Free-Market capitalism which does not require force to exist.

However, since you can't prevent "force" from existing, you can't implement capitalism in a "force-free" environment.

[ZenGum]

Originally Posted by Radar

There are only 2 choices.

1) Free-Market capitalism which does not require force to exist.

2) Everything else.

I am imagining Radar's childhood colouring books ... no colours, just black and white. And not one scribble over the lines.

Seriously:
Force is inherent in a capitalist system. Robbery is the most extreme form of capitalism. Either a system allows robbery (with force) or forbids it (by threat of punitive force). Some force is inescapable.

No market can exist without some kind of government intervention in the form of the regulatory environment that creates the conditions for the market to exist, such as banning fraud, stipulating accounting standards, and so on.
I acknowledge that you were denying the appropriateness of bailing out sub-prime borrowers, presumably with buckets of cash, which is a very different kind of intervention from this regulatory framework intervention. But there is a wide spectrum of possible interventions that fall in between (eg. cutting interest rates, injecting cash for liquidity, etc) and your (EDIT) zero intervention approach doesn't cope with this reality.

You say that markets always take care of themselves. Markets can be manipulated; they can swing wildly and irrationally, and real people get badly hurt by these swings.
Here, I think, is the root of our difference. Maybe markets do always take care of themselves. I don't care about the welfare of the market per se. Markets don't have feelings, interests, needs, in anything but a metaphorical sense. They have no value in the giant moral or utilitarian calculation. They are only of interest insofar as they serve to advance human interests.
It doesn't matter if the market can take care of itself. I care about taking care of the people. And I mean all people, not just brokers or investors or foolish mortgagees.

BUT! I agree that most interventions, like price limits, quotas, subsidies, tariffs, and such, usually provide temporary relief at the cost of making the problem worse in the long term. Bite the bullet, get it over with.
I am also opposed to middle-class welfare. I am opposed to rewarding greed and foolishness (it will just encourage more). And I don't have a solution to the sub-prime crisis that won't involve a lot of people loosing homes they can't afford. This is very rough on them, but ... in this case ... I don't support a buckets-of-cash bailout.

[Radar]

The only valid use of force is for defense. We either trade dollars or bullets. I prefer trading freely and peacefully. Will there be some who don't subscribe to this? Yes, but then using force against them is ok.

[Flint]

So it would take some force to exist.

[Radar]

Capitalism doesn't take force to exist. It only takes force to defend. Capitalism can exist without force. No other system can.

[Flint]

If it can't exist without being defended by force, then it requires force to exist.

[Radar]

Originally Posted by Flint

If it can't exist without being defended by force, then it requires force to exist.

It can exist without being defended by force as long as force isn't used to intervene on the markets.

Capitalism = Freedom. Freedom is to be defended by force, but if there were no force, freedom and capitalism would still exist, while no form of socialism or communism could.

[Radar]

That is pure bullshit.

Robbery has absolutely NOTHING to do with capitalism. Capitalism is the free and voluntary exchange of goods and/or money on a value-for-value basis.

Any form of crime (robbery, fraud, etc) is not capitalism.

Markets can EASILY exist without any kind of government regulations or intervention. In fact they thrive without such intervention.

[tw]

Originally Posted by Radar

Markets can EASILY exist without any kind of government regulations or intervention. In fact they thrive without such intervention.

The stock markets could not exist without that regulation. To make it work - to establish rules so that trades are fair and equitable - only people trained in those laws and regulations can perform that trading. A free market as described would only subvert free market stock trading into a corrupt and avoided market. What makes stock markets so useful? They are safe and regulated places to conduct free market trading.

There is no way around some government regulations in all free markets.

[Radar]

Originally Posted by tw

The stock markets could not exist without that regulation. To make it work - to establish rules so that trades are fair and equitable - only people trained in those laws and regulations can perform that trading. A free market as described would only subvert free market stock trading into a corrupt and avoided market. What makes stock markets so useful? They are safe and regulated places to conduct free market trading.

There is no way around some government regulations in all free markets.

The stock market...and ALL markets could easily exist and would thrive without any government intervention or regulation and would make sure that all trades were fair and equitable because they would be voluntary.

Without government involvement in markets, we'd still have laws against fraud, theft, endangering others, etc.

Free-markets do not lead to corruption or to criminal activity. Government regulations do lead to corruption and criminal activity especially when it comes to the markets.